Republicans Admit That Free Money Helps Create New Jobs for Americans
- Author: Jacob Greene
- Posted: 2024-08-15
More than 50 years ago, Richard Nixon had a plan to give every American a basic income on which to live. That doesn't sound like a policy that today's Republicans would tolerate, let alone endorse or propose. It sounds like something out of the far-left field, like it would come from Senator Bernie Sanders or Representative Alexandria Ocasio-Cortez. Nixon's proposal would have given a family of four $11,000 per year in today's dollars, which isn't much. Surprisingly, Donald Rumsfeld and George H. W. Bush, R-Texas at the time, supported the proposal.
Why the GOP Came Up With the Proposal
In the era of civil rights protests and post-World War II growth, everyone thought the United States would continue to prosper. The Democrats at the time preferred earned-income tax credits rather than a basic income. Labor unions and civil rights leaders didn't like the idea of a free basic income because they thought it would cause workers to not want to work anymore and that it would cause people of color to be kept down economically if they could just get a basic income on which to live. Essentially, the GOP of the time thought that this proposal would trigger more growth because people would save the money. It would essentially increase supply without increasing demand.
Where the Parties Stand Today
Over the past 40 or so years, the GOP has instead turned to hail the "job creators." They have insisted that money go to job creators, because in their political view, the job creators would allow their funds to trickle down to the everyday Joe. This was a regressive economic policy. The New Deal Democrats, on the other hand, have consistently urged an increase in the minimum wage so that no matter what job a person held, they would be able to live decently. However, some economists think that the GOP may finally be on the way to a shift of mindset that moves their stance closer to that of the Democrats'.
How Fiscal Policies Are Affecting Jobs in 2020
On Thursday, December 10, Secretary of the Treasury Steve Mnuchin announced his support for a federal stimulus package that would include an additional $300 per week for people who continue to be unemployed as a result of the COVID-19 pandemic. There was also bipartisan support for the federal government to send a $600 check to every American. The White House announced that it is against such an inclusion in any stimulus deal. Others argue that giving $600 to people who probably have a job instead of $1,200 to people who don't is just an extension of regressive economic policies. Mnuchin reiterated his stance that if Americans get the stimulus checks, they're likely to spend the money, which will fuel the economy into 2021.
Why Mnuchin's Job Stance Differs from That of the White House
Mnuchin's argument is essentially that if Americans are given a small sum, in the range of $600 to $1,200, they'll go out and spend it. They may go to a retail store and buy a new couch, mattress or refrigerator. They may buy clothes or gifts for their children or eat out at restaurants. In essence, they'll spend the money, which keeps retail and restaurant workers employed. Moderate Republicans somewhat agree with this. Conservatives still focus on cutting taxes on the wealthy with the assumption that those wealthy people will use some of their newfound wealth to make more jobs. Mnuchin disagrees with the conservative GOP stance. The tax cuts that went into effect in 2019 didn't work. It's been the financial stimulus that has helped Americans weather the COVID-19 storm this year.
Most Americans Want to Work
Contrary to the naysayers of the proposal around a minimum income for every American, most Americans do want to work. There will always be some people stepping out of labor force participation, such as women who want to raise their children or people who are changing careers and going back to school or learning a new skill. Some people have to or prefer to work informally, such as working as a babysitter or lawn care provider. The gig economy has ballooned in recent years, and economists also expect that trend to continue throughout 2021 as employers seek to cut their expenses by using gig workers instead of employees. That's because they don't have to pay the gig workers any benefits, such as sick leave or health insurance.
